ESTIMATION OF NATIONAL INCOME


Eastimation of National Income

Some important formulas- 
How to change each other
Gross-Dep. àNet,  
    
Net+ Dep=Gross

MP-NIT=FC,   
          
FC+NIT=MP

 DI+NFIA=NI, 
                             
NI-NFIA=DI
{ Dep- Depreciation, MP-Market Price, FC- Factor cost, NIT- Net Indirect Tax}
There are three methods of the Eastimation of National Income-

i) Value Added Method-
GVOMP =Sales+ Change in Stock
GVAMP/GDPMP= GVOMP –IC
(Domestic Income) NDPFC=GDPMP-Dep.-NIT
(National Income) NNPFC= GDPMP-Dep.-NIT+NFIA
(Sales =Domestic Sales+ Export), (Change in stock= Closing stock –Opening Stock)
 (NIT=IT-Subsidy)
(Net Indirect Tax=Indirect tax-Subsidies)

ii) Expenditure Method-
GDPMP=GFCE+ PFCE+ GDCF+ Net Export
GDCF=GDFCF+ Change in Stock
GDCF=NDCF+ Dep.
GDCF=NDFCF+ Change in Stock+ Dep.
(Domestic Income) NDPFC=GDPMP-Dep.-NIT
(National Income) NNPFC= GDPMP-Dep.-NIT+NFIA

iii) Income Method-
(Domestic Income) NDPFC=COE+OS+MI
COE=Compensation of employee+ Employer`s contribution to SSS+ Retirement pension
OS=Income from property (Rent+ Royalty+ Interest)+Profit(Dividend+ Corporation Tax+ Corporation Saving(or Undistributed Profit)
MI=Income of Private Sec.(Household+ Firms)+Public Sec.(Govt.)
(National Income) NNPFC= GDPMP-Dep.-NIT+NFIA
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